Shanghai-based electric vehicle (EV) maker Nio Ltd. (NYSE: NIO) announced that it had priced an upsized secondary offering of 68 million American depositary shares (ADSs) at $39 apiece. At Friday’s closing price of $41.98, the new ADSs are being offered at a discount of around 7%.

The underwriters of the offering (Morgan Stanley and China International Capital) have a 30-day option to purchase an additional 10.2 million ADSs. Each ADS is equal to one share of Class A common stock.

If all the ADSs are sold, Nio will realize gross proceeds of about $3.1 billion. The company raised $1.5 billion in net proceeds from an August offering of 88.5 million ADSs at $17.00 per share. That price was an 8% discount to the closing price of the prior trading session.

The company said it planned to use approximately 60% of the net proceeds of the offering from research and development of new products and new self-driving technologies and 30% to expand its sales and service network. The remaining 10% would be used for general corporate purposes.

The high-flying EV stocks have been using ADSs and common stock to raise cash for months now, with little negative impact on their share prices.

Two other China-based EV makers, Li Auto and Xpeng, have recently raised $1.6 billion and $2.2 billion, respectively, in follow-on share offerings. In February, Tesla raised $2 billion in a secondary offering at $767 a share (pre-split) and in September raised another $5 billion in a deal similar to the one announced last Friday.

Last Friday, Tesla completed an equity distribution agreement with 10 brokerage firms that raised $5 billion in gross proceeds. The company said it planned to use the proceeds of around $2 billion to improve its balance sheet and for general corporate purposes.

At least one analyst firm expects total EV sales to rise from around 2% of total vehicle sales this year to more than 30% by 2030. Consulting firm Deloitte has estimated 2020 unit sales at 2.5 million worldwide, growing to 31.1 million by 2030. To reach that level, production capacity will have to rise exponentially.

In the United States, EVs currently account for about 500,000 of the 15 million or so new light vehicles that are expected to be sold in this pandemic-blighted year. Analysts at Loup Ventures expect U.S. sales of EVs to account for 40% of the U.S. new vehicle market in 2030, selling some 8 million cars, trucks and sport utility vehicles.

To build all those vehicles will require piles of cash, and as long as investors believe in the EV growth story, the cash appears to be readily available.

Nio shares traded down about 2.8% shortly before noon Monday, at $40.81 in a 52-week range of $2.11 to $57.20. The price target on the stock is $37.72, and at the current price, Nio’s market cap is around $56.5 billion.

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